According to a survey of unemployed executives by outplacement firm Challenger, Gray & Christmas, 15.1% of unemployed executives who earned $100,000 or more in their previous job started their own business in the third quarter. That’s up from 11.3% who did so during the previous quarter.
Driving most of those new firms are former high-earning executives who took the opportunity between jobs to start their own company, according to Challenger CEO John Challenger. He said those who had earned $100,000 or more were 94% more likely to start a business than those at lower salary levels. In the latest quarter, only 7.8% of managers and executives earning under $100,000 started their own firms.
“Many of these high earners will find that they are ideal entrepreneurial candidates. What separates them from lower-paid counterparts is a unique combination of exceptionally high levels of expertise, drive and confidence – all of which contributed to their ability to earn such high salaries and all of which are essential to entrepreneurship,” observed Challenger. “They are confident in their ability to start a business and quickly achieve an income level commensurate with their former earnings. This same confidence will prove to be instrumental in their success.”
Helping to drive more high-salaried executives into entrepreneurship is the fact that it is increasingly difficult to find positions that offer six-figure salaries. The number of positions that pay over $100,000 is relatively small and likely to get smaller, Challenger said.
The Challenger data on start-up activity are based on a quarterly survey of 3,000 discharged managers and executives.